Property valuation methods in practice: evidence from Australia

Abidoye, Rotimi B. and Junge, Ma and Lam, Terence Y. M. and Oyedokun, Tunbosun B. and Tipping, Malvern L. (2019) Property valuation methods in practice: evidence from Australia. Property Management, 37 (5). pp. 701-718. ISSN 0263-7472

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Official URL: https://doi.org/10.1108/PM-04-2019-0018

Abstract

Purpose: Improving valuation accuracy, especially for sale and acquisition purposes, remains one of the key targets of the global real estate research agenda. Among other recommendations, it has been argued that the use of technology-based advanced valuation methods can help to narrow the gap between asset valuations and actual sale prices. The purpose of this paper is to investigate the property valuation methods being adopted by Australian valuers and the factors influencing their level of awareness and adoption of the methods. Design/methodology/approach: An online questionnaire survey was conducted to elicit information from valuers practising in Australia. They were asked to indicate their level of awareness and adoption of the different property valuation methods. Their response was analysed using frequency distribution, χ2 test and mean score ranking. Findings: The results show that the traditional methods of valuation, namely, comparative, investment and residual, are the most adopted methods by the Australian valuers, while advanced valuation methods are seldom applied in practice. The results confirm that professional bodies, sector of practice and educational institutions are the three most important drivers of awareness and adoption of the advanced valuation methods. Practical implications: There is a need for all the property valuation stakeholders to synergise and transform the property valuation practice in a bid to promote the awareness and adoption of advanced valuation methods, (e.g. hedonic pricing model, artificial neural network, expert system, fuzzy logic system, etc.) among valuers. These are all technology-based methods to improve the efficiency in the prediction process, and the valuer still needs to input reliable transaction data into the systems. Originality/value: This study provides a fresh and most recent insight into the current property valuation methods adopted in practice by valuers practising in Australia. It identifies that the advanced valuation methods could supplement the traditional valuation methods to achieve good practice standard for improving the professional valuation practice in Australia so that the valuation profession can meet the industry’s expectations.

Item Type: Journal Article
Keywords: Australia, Valuers, Theory and practice, Advanced valuation methods, Property valuation automation, Traditional valuation methods
Faculty: Faculty of Science & Engineering
Depositing User: Ian Walker
Date Deposited: 31 Oct 2019 15:38
Last Modified: 19 Nov 2019 10:02
URI: http://arro.anglia.ac.uk/id/eprint/704917

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